LG reports a huge drop in earnings

LG has reported a serious drop in earnings, thanks to weak sales in its TV and mobile businesses, as well as intense competition and the state of affairs in Russia.

According to a Reuters report, LG Electronics' operating profit fell to 244 billion won (£135m) from 610 billion won in the same period a year earlier, which represents a fall of 60 per cent.

This means the company has witnessed its weakest three-month profit since 2013.

"While the second quarter was more challenging than expected, LG is confident it can recover lost ground in the third quarter with new competitive products and more effective marketing initiatives," the company said in a statement.

The company's two strongest points, TV and smartphoes, have both underperformed, and most of the profit came from the home appliance business that manufactures refrigerators, air conditioners and washing machines.

LG's TV business, smaller only than Samsung's, reported a second straight quarterly loss. According to a Phys.org report, weak currencies in Europe and Russia's hurt are to blame.

„The operating loss widened to 82.7 billion won during the quarter from 6.2 billion won in the previous three months,“ Phys says in a report.

The company had significant growth in North America for smartphones and tablets, but revenue dropped in South Korea, which is traditionally a major source of high-end phone sales for LG.

LG sold a total of 14.1 million phones during the three month period and produced approximately £130,000 of operating income.

The company's stock touched its lowest level in more than 12 years last week, reflecting growing worries about the firm's business outlook.